The sale of an easement if it is a personal asset is to show it sold on Sch D of the personal return.
Easement.
The amount received for granting an easement is subtracted from the basis of the property.
If only a specific part of the entire tract of property is affected by the easement, only the basis of that part is reduced by the amount received.
If it is impossible or impractical to separate the basis of the part of the property on which the easement is granted, the basis of the whole property is reduced by the amount received.
Any amount received that is more than the basis to be reduced is a taxable gain.
The transaction is reported as a sale of property
If you grant an easement on your property (for example, a right-of-way over it) under condemnation or threat of condemnation, you are considered to have made a forced sale, even though you keep the legal title.
Although you figure gain or loss on the easement in the same way as a sale of property, the gain or loss is treated as a gain or loss from a condemnation.
For additional information, please refer to the following link in IRS Publication 544:
IRS Publication 544
